- Players: Gil Oved and Ran Neu-Ner
- Company: The Creative Counsel
- Group: 8 companies
- Employees: 1 100 permanent, and 1 000s more on a casual basis for activations
- How they started: TCC Activations, the founding business, is the biggest below-the-line marketing agency in South Africa
- What they do: TCC finds ways to help its clients get products into stores and onto shelves, and then get those client brands off shelves and into consumer hearts, minds and homes.
- Turnover: R700+ million
- Visit: www.creativecounsel.co.za
If there are two things Ran Neu-Ner and Gil Oved are sure of, it’s that an unrelenting focus on brilliance pays off, and that successful businesses are built on great people.
The problem is that they operate a company driven by excellence, and that comes at a cost: High staff turnover and burnouts.
Their interview style is tough, almost combative, because they know that their industry, and particularly their company, is most people’s ‘not’ cup of tea. But those who do suit the culture find a fit in a R700+ million company that actively promotes personal and business development, will give you as much responsibility as you can take on, and will handsomely reward you.
A fly on the wall of a Creative Counsel job interview would think that co-founders Ran Neu-Ner and Gil Oved don’t want to hire new people. It’s a combative environment. The tension is palpable. Zoom in to the candidate in the hot seat. They’re sweating bullets. They gulp. The questions are flying thick and fast, why, why, why.
No answer is good enough. It’s followed quickly by another why. There’s no time to pull up rehearsed answers. The interviewers are getting to the heart of the candidate – who they are, what they value, and what their work ethic really is.
If the candidate makes it through the interview in one piece, and comes back for more, then maybe, just maybe, they have what it takes to thrive at TCC. But Neu-Ner and Oved aren’t going to make it easy. The word ‘easy’ isn’t in their vocabulary.
The Creative Counsel’s exceptional results over the last 15 years have been driven by a relentless focus on six key, non-negotiable pillars, all of which are centred on how well their employees deliver on TCC’s mandate.
Finding the right people is an essential first step to this process, and it starts with the company’s very first engagement with each employee: The interview.
“For years we had issues around high staff turnover. We realised that the problem started in the interview process. We were hiring the wrong people who didn’t suit our culture, and they would quickly burn out, or challenge our expectations. We realised that 80% of the success of a hire is culture. We just needed to find a way to test culture, as most candidates will tell you what they think you want to hear in an interview.
“Natie Kirsh used to recommend going for a drive. He said that if you sit in the passenger seat and just chat, asking any questions that come to mind, the candidate will soon reveal themselves in the simplest ways. You’ll see the person, and you can make a judgement call on whether they suit the requirements of the position and the company.
“For us, we focus on leading questions. For example, you’re driving to an interview and you’re five minutes late. The robot in front of you goes from green, to orange, to red. What do you do? You’ve just missed orange. How they answer this reveals a lot about their personality.
“We also love the questioning method of four-year olds. Whatever the answer to a specific question is, follow it with a ‘why’. At the beginning it’s not even about the answer. Candidates will always arrive at an interview with certain rehearsed answers. If you keep asking why, eventually they have to start giving you completely unrehearsed, unplanned answers, and that’s when you’ll get a real sense of who they are.
“We also believe it’s important to put pressure on the candidate — again, that’s when you see their mettle. We hate the question ‘what’s your worst quality’. The answer is always their best quality disguised as their worst, like ‘I’m a perfectionist’. But if you ask why, they’re suddenly scrambling for an answer.
“We’re known for our tough interviews. In South Africa, we’re too courteous. We take the opposite approach. We love questions they’re not expecting. This business is most people’s ‘not’ cup of tea. We almost try to convince you not to join us. If you come back after that, you’ll handle the pressure, and we can give you the support and environment to really fly.”
“Our culture is immersive, all encompassing. We want to be a part of your life. We’re proud of our business and the brands we promote. Our teams need to feel that way too.”
Building teams to win
TCC’s team is built on a simple analogy. There are 11 football players on the field, but hundreds tried out for those positions. Only the best make the cut, but they’re also the 11 that are willing to do anything to win. They’ll bleed for their team. That’s a winning culture, and it’s vital if you want to be the best.
The six pillars give the team a framework to work within and follow.
“All six of these pillars are natural to our personalities (well, five of them are, one’s just smart business). They’re the result of us articulating why we believe we’ve been a success, and then finding a way to instil those traits and beliefs into the organisation as a whole.”
“Don’t accept anything less than brilliant. This isn’t about hard work. It’s about output. We’re a top agency in a difficult field. If you’re a member of our team, you need to play at your best. It’s a demanding statement because there are no degrees or gradients. It’s either brilliant, or it isn’t. 100 or 0.
“There are consequences to this – cause and effect. It comes at a cost: Burning people out and high staff turnover; it’s not natural for people to perform at this level 24/7/365. We understand that, and if you do, you will be supported and rewarded. But if you don’t, you don’t belong here.”
Win by a mile
“When we present, clients ask for one concept. We give them three. That’s the way we approach everything. We literally want to leave our competitors so far behind we can’t even see them. We always say that if you’re going to go into a fist fight, take a grenade. We’re also proponents of the virtues of constructive paranoia: Never underestimate what your competitors are doing.
“It’s a sign of the times that we’re the number one agency in South Africa in terms of staff size and EBIT, and yet we’re also an unconventional, non-traditional agency. It shows how things are changing, and how quickly.
“Everything’s moving at an incredibly fast pace: New thing, new thing, new thing, and if you want to stay ahead of the curve, you need to be leading those new things, not following. It’s fatiguing, but so important.
“This is so engrained in us though. We, Ran and Gil, are the two biggest competitors here, and that drives us. We’ve always sat next to each other, competing. We were so busy competing against each other that we left our competitors behind.”
Grow those who grow our business
“Suppliers, partners, staff – we proactively assist and find ways to grow people and their businesses. We’ve never done this according to brief.
“We don’t make our staff climb the corporate ladder just because. If they shine, we bounce them, whether they’re 27 years old or 47 years old. This isn’t about experience – it’s about skill, competency and hunger. If you’re a maverick who wants responsibility, we’ll give it to you.
“In an industry notorious for retrenchments based on contracts being won and lost, we’ve also never retrenched staff – not in 14 years. We’ve fired people, but we’ve never retrenched anyone. We’re a large employer, and we’re proud of that. We create employment, and if you give your heart and soul to the business, you’ve got guaranteed employment.
“This same focus on growth extends to our suppliers as well. We pay very quickly. We don’t generally ask for credit terms. We know that if we get them their cash quickly, it makes a huge difference to their business. Guys know we care about their companies. We love that they’re making profits from us as well. That’s what grows their business. As a result they’re fair to us too – they don’t rip us off. And most importantly, when we really need them, when we have to deliver something quickly, they’ll bend over backwards for us.”
“The rule is simple: You can challenge anyone, at any time, but you must play the ball, not the man. It’s not allowed to get personal. So we can say to each other, what you’ve said is idiotic. But we can’t call each other idiots.
“We really believe in a sense of competition, and healthy, heated debate is part of this. It’s bred into our backgrounds. You respect your parents, but if you disagree with something they’ve said or decreed, that’s where the negotiation begins. You need to find the angle to get your way.
“Both of our offices have one glass wall that faces the rest of the floor. We’ve created an egalitarian workspace that strips down hierarchies. We’re completely open plan, and even though we do have offices (and wish we didn’t), we’ve kept them as transparent as possible. Everyone can see what we’re doing, at all times. But this means everyone can see us fight as well. We always laugh at newbies to the company.
“Within their first week, at some point, one of us will be in the other’s office and we’re shouting at each other. What follows is the invariable wide-eyed question to their manager: Is the business closing down? The reply is always, nope, that’s just Ran and Gil. And so their induction to healthy, heated debate begins.
“We really believe that the more and harder you debate something, the better. You chip the block away from all angles, and you’ll find the best answer and a better result.
“As business partners, we might not always agree with each other, but we’ve always had the same intent: What’s best for the business? Logic will prevail. Yes, we also have egos, but we always know that if logic prevails, the best decisions are made for the good of the business — but we also approach each debate with an attitude of ‘you better really convince me I’m wrong.’
“And this filters down to the whole company, from managers to new employees. Anyone can challenge anyone, as long as it’s not personal and logic prevails.
Related: Advice: 2 Minutes with SA’s Top Entrepreneurs
“We end up with juniors who think they have a right to challenge us – and they do. If Ran tells a junior copywriter his idea is bad, he can (and will) fight for it. On one memorable occasion, a junior copywriter actually came back six times to defend his idea, until he finally won the debate. Logic prevailed and he proved to Ran that he was right. In front of everybody – this didn’t happen quietly behind a closed door.
“This is so engrained in the company and our culture, that negativity and personal attacks are nipped in the bud – and we don’t need to do it, the staff do it. They approach someone who is getting personal and call them out on it. That’s not the way things are done here. When a culture is properly engrained and supported, employees themselves will maintain and defend it.”
Colleagues first; everything and everyone comes after
“This is the only one that didn’t come to us naturally. Clients come first, that’s always been our motto. So much so that in our start-up days Gil was called our ‘doctor on call’. It didn’t matter what he was doing, if his phone rang he’d answer the call and see to the client. Nothing was more important.
“As we grew though, we realised that it wasn’t just the two of us anymore, and you can’t deliver to clients without a happy family. That’s why this pillar is so important.
“If you walk out of a meeting and have two calls, and one’s a client and the other’s a colleague, your first instinct is to call the client first. That’s the wrong response. You don’t know why your colleague is calling. It could be to warn you about something related to the client.
It could be because they have three clients waiting on an answer or input only you can provide. Family must come first.
“It’s also important for everyone on the team to know that their managers, colleagues and us have their back. Once you know that you’re supported, you’re more likely to make key decisions on your feet, and those are generally the decisions that drive the business forward.
“Of course we try not to lose clients, but the reality is that there’s no real client loyalty. It’s the nature of the industry. You’re always pitching for your next campaign, and the client will choose what’s right for them, not for you. But your team should be here to stay, so care about them and look after them.”
Partner with integrity
“Do everything with integrity. Creating demand, finding a spin, convincing people to spend their cash: This isn’t an industry known for integrity. But we know that money comes and goes, but reputation is forever. That should always be your focus, and the rest will look after itself.”
It took Neu-Ner and Oved five years to hit their first R100 million in turnover. It’s an impressive number, and yet they believe it should have happened much quicker.
“At the time, we’d been so busy working in the business that we looked up and we’d hit R100 million. If we knew then what we know now though, that point would have been reached much quicker.
“One of the biggest reasons our early growth was slow was because we needed a five year view, but we only had a one year view. We didn’t trust our own growth plans, and as a result we didn’t have proper systems in place, or the guts to hire the right people for the right jobs. We didn’t believe enough in ourselves and our ‘big’ business.
“We started hitting a proper growth curve when we realised this and changed our attitude. Too many entrepreneurs know that they should hire people better and smarter than them, but they’re scared. They don’t want their position as business owner, leader and largest shareholder invalidated.
“The realisation that as the entrepreneur, you’re the one who takes the risk, who recognises the talent and who brings a winning team together completely validates your position. This is when the tipping point occurs, and also when you can start focusing on real growth strategies.”
Another key point that Neu-Ner and Oved highlight is that entrepreneurs have a tendency to believe that their personal touch is all important – if they aren’t involved in everything, the business won’t succeed. They’re also very conservative about costs. “Eventually, if you’re lucky, and you’ve still managed to build a sustainable, growing enterprise, the business will get too big, and you’ll need to let go.
For us, if we’d let go sooner, we’d be ahead of the curve. We wasted a lot of time and resources thinking small.”
One of their key examples is the finance department: “We’re two born entrepreneurs – neither of us likes systems and processes. Our sales were always faster than the systems we could implement, which has meant our systems are always playing catch-up. Even though we understand this, we still waited far too long before putting a proper finance department in place.
“In terms of job titles – and this is true of pretty much all job titles – the difference in cost to company between a mediocre employee and the best in the market is about 20%. But the difference in output is 100%. Today we know to just pay the money. A good financial director costs about R250 000 per year more than an okay financial director. But the mistakes that the good FD stops you from making can run in the millions. We know that if we’d had that vision years ago, we would have saved millions.”
Turnover vs profit
There are different levels of growth, and they’re often dependent on your company’s lifecycle.
“First, you’re just trying to stay open and pay your bills. You’ll be fine, but you need to maintain growth, which impacts your personal life and health. The next level, which for us happened in 2011, is putting a management structure in place. If you really want to grow, it’s important for this to be a top-class management team.
“This is an area where we had previously made mistakes. You’re trying to do things on the cheap, which results in two things: One, you have poor or incorrect hires, or two, you end up with ‘compression’ managers, where all managers (including us) are performing multiple roles – your role, and the role below you. No one is working exclusively at their pay level, and that impacts the more strategic growth areas of the business.
“During this first period, you’re concentrating on top line growth. This is important. Revenue gives you the confidence to build your business. It allows you to become a player in the market, to scale and to leverage your suppliers (the bigger you are, the more you purchase, the better you are as a client, the more you can negotiate better rates, and so on).
“But with revenue comes a cost of sales as well. All revenue that comes into the business has certain responsibilities tied to it – supplier invoices, salaries, overheads. This is where the next level of growth comes in.
“Efficiencies are where you save money, and this directly impacts the bottom line and your profits. Revenue and efficiencies are not mutually exclusive, but where you are in your lifecycle will dictate which is more important and requires more focus.
“Get revenue first. Once you’ve started growing though, it’s time to focus on efficiencies and EBIT (earnings before interest and tax). If you ignore that, you’ll never make great profits.
“Our analogy is that revenue is the fuel that drives your car. Without fuel your car won’t move, so it’s important. But once you’re on the highway, you can now start worrying about efficiencies – how far can you travel on one tank, where are your efficiencies, where can you save on fuel costs?
“Revenue is important. But, it’s not about turnover; it’s about leftover. From a turnover perspective, we’ve had good, steady growth since we launched. We reached a point where our turnover could no longer double though, and that’s when we started looking seriously at our earnings. In 2014, our earnings doubled.
“We’ve invested in systems, in managing the business better, and we’ve become a lean, mean operating machine. We watch our costs, and we look for every little efficiency we can find. The results have been phenomenal, and that’s where real future growth and earnings lie.”
7 Foundational Values Of Brand Cartel And How They Grew an Iconic Business From The Ground Up
Marco Ferreira, Renate Albrecht and Dillon Warren built Brand Cartel, a through-the-line agency, that delivers exactly what they wanted — and has grown exponentially as a result.
- Players: Marco Ferreira, Renate Albrecht and Dillon Warren
- Company: Brand Cartel
- Launched: 2013
- Visit: brandcartel.co.za
“We’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do.”
When Dillon Warren, Renate Albrecht and Marco Ferreira launched Brand Cartel in 2013 they were in their early 20s with zero agency experience between them. The idea had started when Marco recognised that social media was taking off, but no agencies were playing in that space yet. It was a clear opportunity.
Printing flyers that said ‘Your social media is so last season’, Marco and Renate went from store to store in Sandton City, pitching their services. When Dillon joined them a few months later because they needed someone to handle the company’s finances, they had two laptops between them, R6 000, which Dillon had earned from a Ricoffy advert, and sheer will and tenacity.
“We shared a house to save on rent and split everything three ways,” says Renate. “At one point we hadn’t eaten in two days. My mom lent me R500 so I could buy Futurelife and a bag of apples for the three of us.”
The trio hired their first employee soon after launching Brand Cartel, and after prioritising salaries and bills, there wasn’t much leftover. “Dillon actually paid us R67 each one month,” laughs Marco. “That’s what was left — although I still can’t believe he actually sent it to us.” It was at this point that the young business owners realised they needed credit cards if they were going to make it through their start-up phase — not an easy feat when your bank balance is under R100.
“Looking back, those days really taught us the value of money,” says Dillon
“We spent a lot of time with very little, and we’re still careful with money today.” Through it all though, the partners kept their focus on building their business. “It almost didn’t work for a long time. We were young and naïve, but in a way, that was our strength. We didn’t have any responsibilities, and we’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do. All of our business has been referral business. It takes time, but we focused on being the best we could be and giving everything we had to our clients. Our differentiator was that we really cared, and were willing to offer any solutions as long as they aligned with our values.”
This is how Brand Cartel has grown from a social media agency into PR and Media Buying, SEO and PPC Strategy, Digital and Print Design, Web Development, Campaign Strategy and now an Influencer division. “It’s an incredibly competitive space with low barriers to entry, which meant it was easy to launch, but tougher to build a client base,” says Renate. “I’d sometimes cry in my car between sales pitches, and then walk in smiling. We had no idea if we’d make it.”
The perseverance has paid off though. Strong foundations have laid the groundwork for exponential growth over the past year, with turnover growing almost ten-fold in 2017 thanks to relationship-building, strong referrals and fostering an internal culture and set of values that has driven the business to new heights as a team.
Like many start-ups, Renate, Dillon and Marco have made their fair share of hiring mistakes, but as the business grew and matured, the young entrepreneurs began to realise that the success of their business lay in the quality of their team and the values they stood for.
This meant two things: Those values needed to be formalised so that they could permeate everything Brand Cartel does, and they needed a team that lived, breathed and believed in them.
“We’ve had some nasty experiences,” admits Dillon. “You should always hire slowly and fire fast, and for five years we did the opposite. We’ve hired incredible people, but we’ve also ended up with individuals who didn’t align with our values at all, and that can destroy your culture.
Dillon, Marco and Renate realised they needed to put their values on paper. “We did an exercise and actually plotted people based on a score grading them against our values, so we knew where our issues were. We knew what we wanted to stand for, and who was aligned with those values. We were right; within a few weeks resignations came in and we mutually parted ways.”
The team that stayed was different. They embraced Brand Cartel’s values, and more importantly, it gave the partners a hiring blueprint going forward.
“Values are intangibles that you somehow need to make real, so it’s important to think about the language you use, and how they can be used in a real-world work context,” says Marco.
The team has done this in a number of ways. First, they chose ‘value phrases’ that can be used in conversation, for example, ‘check it, don’t wreck it’, and ‘are you wagging your tail?’ Team members can gently remind each other of the value system and focus everyone on a task at hand simply by referring to the company’s values. “In addition, when someone is not behaving according to those values, you can call them out on the value, which is an external thing, rather than calling them out personally,” explains Dillon.
Second, all performance reviews are based on the values first. This means everyone in the organisation begins any interaction from a place of trust, knowing they are operating according to the same value system.
“When you’re in a production environment with jobs moving through a pipeline, there can be problems and delays,” explains Marco. “Instead of pointing fingers when something is over deadline or a mistake is made, our team can give each other the benefit of the doubt and work together. They trust each other, which creates cohesion. We all work as a team, which impacts the quality of our work and the service we offer our clients.”
The system is simple. Coaches will step in first if there is an issue before it escalates to the Head of Team Experience, Nicole Lambrou. If Nicole is called in, she will address the problem head on. “Inevitably it’s something fixable,” says Marco. “By addressing it immediately and in the context of our values it can be sorted out quickly. Ultimately, the overall quality of our team improves, and we are a more cohesive unit.”
The founders have seen this in action. “I recently arrived at a client event and three different people came up to me and complimented my team on the same things — all of which aligned with our values. Everyone at Brand Cartel lives them, internally and externally,” says Renate.
The value system has also shaped how the team hires new employees. “We used to meet people and hire for the position if they could do the job,” says Renate. “But then we started realising that anyone can hold up for an hour or two in an interview. You only learn who they really are three months and one day later.
“We need people who walk the talk, and we really only had a proper measurement of that once we articulated our values. Our interview style has changed, but so has what we look for.”
Here are the seven values that Dillon, Marco and Renate developed based on what they want their business to look like, how they want it to operate, and what they want to achieve, both internally, and in the market place.
1. Play with your work
Our goal is for everyone on our team to become so good at what they do that it’s no longer work. Once that happens you love your job because you’re killing it. It’s why sportsmen are called players, not workers, and it starts with the right mindset.
2. Wag your tail
The idea behind this value stems from Dale Carnegie, who said ‘have you ever met a Labrador you don’t like?’ In other words, we all respond well to people who are friendly. It needs to be genuine though, so again, it’s a mindset that you need to embrace.
We live these values whether we’re at the office or meeting clients. If you go into each and every situation with joy and excitement, from meeting someone new to a new brief coming in, you’ll be motivated and excited — and so will everyone around you.
3. Check it, don’t wreck it
The little things can make big differences. Previously it was too easy to pass the buck, which meant mistakes could — and did — happen. Once you instil a sense of ownership and create a space where people are comfortable admitting to a mistake however, two things happen. First, things get checked and caught before there’s a problem. Second, people will own up if something goes wrong. This can help avoid disasters, but it also leads to learnings, and the same thing not happening again.
4. What’s Plan B (aka make it happen)
We don’t want to hear about the problem; come to us with solutions, or better yet, already have solved the problem and made it happen. We reached a point where we had too many people coming to us with every small problem they encountered, or telling us that something wasn’t working so they just didn’t do it.
That wasn’t the way we operated, and it definitely wasn’t the way we wanted our company to operate. We also didn’t want to be spoon feeding our team. It’s normal for things to go wrong and problems to creep in — success lies in how those problems are handled.
Ignoring problems doesn’t make them go away, so we embrace them instead, encouraging everyone on our team to continuously look for solutions. For example, the PR department holds a ‘keep the paw-paw at Fruit & Veg City’ meeting every morning, where we deliberately look for where problems might arise so that we can handle them before they do. We start with what’s going wrong and then move to what’s going right. You need to give your team a safe and transparent space to air problems though. We don’t escalate. We need to know issues so that we can collectively fix them, not to find fault.
5. Put your name to it
It’s about pride in work and making it your own. When someone has pride in what they’re doing, they’ll not only put in extra time and effort, but they’ll pull out all the stops to make their creative pop, or go the extra mile for a client.
We need to find the balance between great quality work and fast output though. One way we’ve achieved this is by everyone reviewing the client brief and then committing to how long their portion will take.
When someone gives an upfront commitment, they immediately take ownership of the job. It took time for us to find our groove with this, but today we can really see the difference. Our creative coaches also keep a close eye on time sheets and where everyone is in relation to the job as a whole to keep the entire brief on track. If someone is heading towards overtime we can immediately ask if something is wrong and if they need assistance.
We also celebrate everything that leaves our studio. Every morning we have a mandatory 15-minute catch up session where we check in on four core things: How am I feeling (which allows us to pick up on the mood in the room and the pressure levels of our teams); What’s the most important thing I did yesterday; What’s the most important thing I’m going to do today (both of which give intention and accountability); and ‘stucks’, issues that team members need help with. We then end off with our achievements so that we can celebrate them together.
6. Keep it real (aka check your ego at the door)
We believe in transparency. At the end of the day we’re all people trying to achieve the same thing, but it’s easy for ego to creep in — especially when things go wrong. You can’t be ego-driven and solutions-orientated. If clients or team members are having a bad day, you need to be able to focus on the solution. Take ego away and you can do just that. It’s how we deal with stucks as well. We can call each other out and say, ‘I’m waiting for you and can’t do my job until I receive what you owe me,’ and instead of getting a negative, ego-driven reaction, a colleague will say, ‘sorry, I’m on it.’
7. Walk the talk
For us, ‘walk the talk’ really pulls all our other values together. It’s about being realistic and communicating with each other. If you’ve made a mistake or run into a problem, tell your client. Don’t go silent while you try and fix it. Let them know what’s happening and fill them in on your plan of action.
Walk the talk also deals with the industry you’re in. For example, if you’re a publicist, you need to dress like a publicist, talk like a publicist, and live your craft. In everything we do, we keep this top of mind.
John Holdsworth Founder Of Tautona AI Shares 4 Disruptive Strategies That Are Changing The Insurance Industry
What can we do now that we couldn’t do before, thanks to changes in technology?
“Disruption isn’t just doing things in a different way which doesn’t resonate or go any further — it’s about changing the game. Being disruptive means taking a look at an industry and finding a way to do it differently, giving you an advantage over the incumbents.”
- Player: John Holdsworth
- Company: Tautona AI
- Est: 2016
- Visit: www.tautona.ai
Disruptive innovation is the catchphrase that defines the last 20 years. New technologies, business models and media have disrupted the way we do just about everything. Conventional wisdom has it that the new kids on the block are the ones who are going to own the market at the expense of industry stalwarts, but this innovative South African disruptor is showing them how it’s done.
1. It’s the experience economy, stupid
Regardless of how the world changes, organisations that consider their customers’ emotions and experience first, win. That’s exactly what Tautona did. They put themselves in the customers’ shoes and asked one key question: ‘What’s wrong?’ Few industries are as ripe for disruption as insurance. When John Holdsworth co-founded cognitive automation business Tautona AI in 2016, he knew that there had to be a better way for insurers to handle client claims.
Tautona AI emerged out of a consulting engagement John had with a large insurance company. With a background in IT, he is a highly experienced technology executive and entrepreneur who has started a number of successful companies. He says he loves the energy and adrenalin associated with start-ups. He pioneered the use of digital signatures in South Africa, founded mobile payments company PAYM8, and converged voice and data provider ECN, which he sold to Reunert for R172 million in 2011. The experience acquired over this time meant he was ready to take on a massive challenge.
“When a policyholder submits an insurance claim, that action should trigger an instant decision, with the outcome immediately communicated back to the policyholder,” John says.
“Customers want swift claims handling, communication, and compensation. They want the same instant gratification that they get from online banking. So that’s what we set out do — to revolutionise the entire claims process. We have made traditional claims processing a thing of the past by pioneering a cognitive solution that is making the claims process faster, smarter and more efficient.”
2. Automating judgment tasks once reserved for humans
Tautona’s claims automation solution uses artificial intelligence to instantly approve or refer claims for further investigation. By using machine learning algorithms to identify patterns in the data, Tautona’s solution identifies fraudulent claims, enabling insurers to halve fraudulent claim losses.
Tautona also uses Robotic Process Automation to integrate to legacy systems, removing the need for traditional programming techniques. This means that Tautona’s claims automation solution can be implemented with minimal disruption to a business. By automating decision-making, communication, and compensation, Tautona enables insurance companies to take a major step towards becoming true digital insurers.
3. Ditch the legacy systems, start from scratch
Disruptive innovators invest in digital strategies so that they can find new ways of responding to their customers’ evolving needs. The founders of Tautona AI agree on several principles, but one that stands out specifically because it goes entirely against traditional thinking, is the importance of starting from scratch.
“You cannot take a non-digital business model and expect it to work online,” says John. “Instead of using old methods, you need to start from the beginning. Ditch the legacy systems, take a leader mentality and imagine the art of the possible.”
This iterative, modular approach typically begins with defining the strategy and programme plan upfront, delivering a core capability fast so it can provide benefits immediately, and then continuously improving with regular, incremental capability improvements to achieve the objectives of the strategy. It’s an approach that fosters closer collaboration between stakeholders, improved transparency, earlier delivery, greater allowance for change and more focus on the business outcomes.
4. Shaking up an industry
How do you launch new solutions and educate customers who are used to doing things the way they have always been done? John says resistance to change is inevitable. That’s why you need more than good technology.
“When you introduce something ground-breaking to the market, you encounter many different types of personalities asking diverse questions. That demands an approach that is client-centric and entirely customer focused. It also means you have to spend time developing a sound business case to present to decision makers.”
A solid business case documents the justification for the undertaking of a project. It’s the way you prove to your client and other stakeholders that the product you’re pitching is a sound investment. You need to justify the project expenditure by identifying the business benefits the innovation will deliver and that your stakeholders will be most interested in reaping from the technology.
“Essentially, it’s about proving you can deliver,” says John. “When you have an entirely new proposition, the only way you can hope to get your foot in the door is with a value proposition so profound that clients are forced to take a look at it.”
Tautona has convinced a number of South Africa’s top insurers to implement their AI-powered claims automation solution. The results to date have been ground-breaking, with insurers dramatically reducing turnaround times and processing fees. As a result, Tautona’s sales pipeline is full to the end of the first quarter of 2019.
“But there’s no rest for disruptors. Nokia and BlackBerry crumbled because they were slow to react to market changes, and they underestimated the challenge from Apple and Samsung. The only way to retain leadership is with relentless innovation, that is, a constant flow of new versions and features. That applies in any industry today.”
Tim Hogins Started Out As A Security Guard, Today His Has A Turnover Of R150 Million And Has Self-Funded Three Huge Lifestyle Parks
As a poor township kid, Tim Hogins watched kids pile into buses heading to Sun City every weekend, knowing he couldn’t afford to join them. He was a youngster, but he made a promise to himself. One day he would build parks that anyone could visit — especially underprivileged kids like himself.
- Player: Tim Hogins
- Company: GOG, formerly Green Outdoor Gyms
- Est: 2012
- Turnover: R110 million
- Projected Turnover: R150 million (2018)
- Visit: gog.co.za
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that – I want to employ people, develop them, push boundaries and see where we can take this.”
“Poverty can be a good thing, because growing up poor makes you creative, and that’s an incredible power if you know how to use it.”
Seven years ago, Tim Hogins drove out of an office park and pulled onto the side of the road because he was having a panic attack. His car was closing in on him, he couldn’t see and he couldn’t breathe. After months of hard work, it was all over. His dreams were shattered.
Tim isn’t the first entrepreneur to find himself here, and he won’t be the last. What separates him from countless other aspiring business owners is that despite a massive setback, he didn’t back down. He sat in his car, phoned his wife, and told her what had happened. Instead of telling him it was time to move on and find a job, she asked him how they were going to cobble together the money he needed to start again.
And that was the beginning of Green Outdoor Gyms, a vision Tim had been nurturing for almost two years. A business idea that had led to his retrenchment and was almost ripped away from him by his business partners and investors.
But he didn’t quit. He pushed on. And today his business has a projected turnover of R150 million and has self-funded three huge lifestyle parks that Tim hopes will impact the lives of thousands of underprivileged children while providing jobs for hundreds more.
The in-built art of tenacity
To understand Tim, you need to understand where he came from. As a township kid growing up in Randfontein on the West Rand of Johannesburg, Tim always helped his parents to sell stuff. They were traders. His dad had a small café selling burgers and chips, and his mom baked. While other kids in the area piled into buses for Sun City on the weekends, or visited a local bird park, Tim had to work or the family didn’t eat.
“I matriculated in 1996, and even though I had an exemption, tertiary education wasn’t on the cards for me,” he says. “We just couldn’t afford it.” But Tim had a plan. His cousin told him about a free four-week course to become a security guard, and Tim aced it, securing a position at one of the firm’s top industrial sites.
Here’s the first secret to Tim’s success. Instead of seeing a dead-end job, Tim saw an opportunity. If he did his job well, he would progress to a driver, and then a cash-in-transit guard. From there the plan was management. Becoming a security guard wasn’t his fate because he couldn’t get a degree — it was step one to the rest of his life.
“I was raised to be the best version of myself. Everything is what you make of it. In primary school I was head boy, and in high school the head of the SRC. There’s always a way to grow and improve yourself.”
Two years into his career as a security guard, Tim heard about another opportunity — a free programming course teaching COBOL, a back-end system used by the financial services industry.
“I grew up 500 metres from Stafford Masie, who would go on to become the first head of Google South Africa and is one of our country’s greatest tech entrepreneurs,” says Tim. “I had zero programming experience — I’d never touched a computer — but I knew how valuable these skills were, and here was an opportunity being handed to me.”
It wasn’t quite as easy as Tim imagined. He failed the aptitude test and had to take it again. Once he was on the course, he failed that too — it was a programming course after all, and Tim needed a far more basic introduction to IT. He didn’t give up though. He’d quit his job and needed to make this work while he was still living with his father and didn’t have financial responsibilities, so he begged the course administrator to let him retake the programme. This time he passed, and found a job at a small IT firm.
Once there, Tim built up his IT acumen. Over the course of his IT career Tim worked for Dimension Data, EOH and SITA. In his final three years he applied for an account management position and moved into sales. His goal was to become a business owner, and so he diversified and learnt what he could about business.
He also paid attention to the world around him, looking for a business opportunity or problem he could solve. He dabbled with some ideas, but the one he kept coming back to was outdoor gyms.
“I saw kids in parks doing sit-ups, push-ups, pull-ups on trees, and kept thinking there must be a better way than this for them. I knew that a proper solution would be good for the whole community — giving kids and parents a safe and free environment to play in and focus on their health. I focused on poorer communities, where gym fees weren’t an option, and kids needed safe places to play and keep out of trouble.”
The more Tim unpacked the idea, the more he began to believe in it. And then his employers found out, and made it clear that they did not like Tim’s attention divided between his job and his business idea. Despite this, Tim continued to focus on his entrepreneurial play, and within a few months he’d been retrenched, ostensibly due to a restructuring of the business, yet Tim was the only person let go.
It was October 2010 and Tim had no job, two-months’ salary and he was about to get married. But it was the best thing that could have happened to him. “That retrenchment catapulted me into business. From then on, my full focus became outdoor gyms.”
Winning and losing
Tim had approached Joburg City Parks who where interested in the idea. He had also met with an engineer and they had begun to design the equipment. There was just one small problem: Money.
“I knocked on doors, approaching anyone who would listen. One investor laughed at me. He said I’d gone from IT to playing with steel — what was wrong with me? A contact at SITA said flat out that she wouldn’t help me. Looking for funding can be incredibly demoralising. I had an idea and a letter of intent from Joburg City Parks, and it still wasn’t enough.”
And then Tim was introduced to a group of investors who wanted to instal kids play areas in municipal parks. Tim had the City Parks connection; they had the funding. They entered into a business partnership and built a prototype together. This was when Tim’s wheels fell off.
“I was invited to a meeting by my three business partners, and when I arrived there were five people in the room — my partners and their two lawyers. We’d entered into the agreement as 50/50 partners, and they wanted us to all be 25% shareholders. I couldn’t agree to that. This was my idea, my connection, my baby.”
By the time Tim left the meeting, he had no funding, no partners and no prototype and he knew City Parks was getting impatient. All he’d done was create competitors — and they had a demo model.
Tim had spent most of 2011 looking for funding and then building the prototype once he found his partners. He wasn’t just back to square one, he was behind where he’d started months ago. Hence the panic attack.
It was a pivotal moment. Give up or push on? Tim chose to push on. That night, Tim and his wife, Rona Hogins, sat down and came up with a plan. They would sell one car and Rona would apply for a bank loan. Together, they managed to come up with R200 000. Tim approached a friend who was interested in a side business and they launched LXI, an importer of screens for media companies. LXI brought in enough to pay the bills while Tim concentrated on getting Green Outdoor Gyms off the ground.
Then luck stepped in. “I drove past a warehouse and saw some play equipment. Instead of driving on, I pulled in and pitched my business idea to the owner.” The owner, Neta Indig, agreed to build Tim’s prototype at cost, in exchange for a long-term partnership. Tim agreed. His R200 000 would be enough to get the business back off the ground. Green Outdoor Gyms was officially launched in February 2012.
Here’s the thing about luck though. Unless you’re open to opportunities, paying attention and willing to step out of your comfort zone, luck alone will get you nowhere. By the time Tim drove into Neta’s parking lot, he’d spoken to countless investors, had doors shut in his face, lost a partnership and his prototype, and was still willing to look for any opportunity that might present itself. Through sheer will and tenacity, he found it.
After the first outdoor gym was installed, two things happened. The competition Tim had feared from his old partners didn’t materialise. It was Tim’s first real lesson in the power of passion. He’d doggedly pursued his idea for over two years. His partners, who didn’t share that passion, did nothing with the prototype they’d acquired. Tim was still — at that stage — in blue ocean territory.
The second was how quickly an idea can take off once the foundations are in place. GOG’s turnover was R3 million in its first year, and orders were flooding in from municipalities throughout South Africa.
Tim was invited to present his solution in parliament, and it was included in the National Development Plan. “Everything escalated faster than I could have imagined,” he says.
“The reality is that we’re an obese nation. It’s a real problem. On top of that, 90% of the country can’t afford commercial gym fees. Under the National Development Plan, every community was earmarked for an outdoor gym. Government saw my vision and they bought into it.”
Tim had to tender for each new site, but he had a first-mover advantage. By the time other players entered his space he’d already built up a track record. His team’s turnover times are impressive and the business doesn’t only design and instal the equipment, but can also overhaul a derelict park. The quality of his products ensures that equipment lasts at least eight years with no maintenance, although once an outdoor park is installed, the community takes ownership of it, cleaning it regularly and maintaining the area.
In six short years, GOG has installed over 1 000 outdoor gyms for local municipalities around the country, and there’s still room for growth. There are currently between 5 000 and 10 000 sites available, and while Tim doesn’t believe they will get all of them, the business will continue to expand. “I believe we still have a ten-year run with government-funded outdoor gyms, but this is no longer our core business.”
In fact, GOG has grown and changed considerably since that first outdoor gym was installed in February 2012.
“I’m an opportunist. I pay attention to developments around me and am always on the lookout for where we can add value,” says Tim. As a result, GOG is now developing its own sites and supplying equipment to the industry — across private and public sectors.
“You need to know that competitors are coming,” says Tim. “When we started out we had a niche with outdoor gyms and government, but someone will always want to eat your lunch. If you know that someone’s paying attention to what you’re doing and that everyone needs to diversify, you can stay ahead of your competitors.
“Our business is centred around health, fitness and family, and this understanding has allowed us to grow into lifestyle spaces that support our core focus.”
As a result, GOG has expanded to the installation of play areas and outdoor gyms for hotels, private and public schools, beach parks and lifestyle estates, including Steyn City.
“We also have a registered landscape company,” says Tim. “We can take vacant land and transform it into a park with grass, trees, water and pathways. We have a Geotech division that does soil testing and environmental studies.”
None of this happened overnight. It takes time to build a reputation, but if you’re focused on four key things, you can build a sustainable business. “You need to diversify your product range, diversify your customer base, nurture relationships and push outbound sales,” says Tim.
Tim has geared the business for scale, which is critical in a production and manufacturing context. “We have always outsourced our manufacturing, first with Neta, and later to a Chinese manufacturer who has become integral to our success.”
Tim’s relationship with Neta was critical in the start-up phase, but after two years the manufacturer decided to focus on his core. “We were too big — it wasn’t a side project anymore, and Neta wanted to remain in construction,” says Tim. “I needed to either find another manufacturing partner, or move into that space myself.”
Tim visited manufacturing facilities in China and sourced samples until he found a plant that could handle GOG’s volumes and quality. “Chinese manufacturers value loyalty and they’ll do whatever you want at the price point you ask. If you want a cheap product, you’ll get it — and the quality to match. Good quality costs more. I have an excellent relationship with our supplier — so good that he flew out to South Africa to see our operations, because he was impressed with the volumes he produces for us.”
It’s this relationship and the capacity available to Tim that has allowed him to take the next step towards his ultimate vision for GOG: Lifestyle parks.
Living the dream
GOG’s first lifestyle park stemmed from Tim’s need for a showroom and his life-long dream to give underprivileged children access to entertainment parks that he couldn’t afford when he was a child.
“We were manufacturing outdoor parks and I started thinking about other ideas in this space that aligned with our vision and niche. I needed a showroom that could showcase everything we can do, from ziplines to climbing walls, swimming pools to spray pools and outdoor gyms. A lifestyle park was the natural answer to everything I wanted to achieve.”
GOG Lifestyle was opened in November 2016 and is situated off the N14 near Lanseria Airport. It’s close to a number of townships, including Diepsloot and Cosmo City. “The revenue model is corporate team building events, family days and launches, which allows us to run specials for kids, the elderly, and CSI projects for schools and churches.”
The next lifestyle park, GOG Gardens, was opened in Soweto in December 2017. Bigger than the first lifestyle park, GOG Gardens caters for picnics, outdoor events and concerts. It’s a multi-purpose venue with seven venues in one, and also focuses on corporates, the general public and events, with CSI projects that support children.
“We have launched some smaller projects, such as GOG Kids at Chameleon Village in Hartbeespoort and a play area in Vilakazi Street, but our next big project is Happy Island, a 36 hectare water park off Beyers Naude Drive in Muldersdrift.”
Happy Island is GOG’s first joint venture with an investment partner, Tim’s Chinese supplier. Unlike the other lifestyle parks, which GOG self-funded from cash reserves, Happy Island is a multi-hundred million rand project with large capex needs. “The idea came to life when the chairman of our manufacturing supplier visited our operations in South Africa. There are no water parks in South Africa similar to those I visited in China. We are doing something completely new and exciting, and we broke ground in April 2017.”
All of GOG’s lifestyle parks have required high capex investments and have not yet reached break-even, unlike the smaller projects that will reach break-even within a few months. “Our projection for the lifestyle parks is three years, and five years for Happy Island,” says Tim.
“My long-term goal is to have ten lifestyle parks across South Africa, one in each region, and that’s what I’m investing in. We want to make a difference, give kids access to these parks and employ people.
“I’m here today because of my childhood experiences, but before I could invest in this dream, I needed to start small and build up my reputation and cash reserves. To achieve my ultimate dream will take a lot of investment, so that’s the focus.
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that — I want to employ people, develop them, push boundaries and see where we can take this. When someone says something is impossible, I want to know why, and then try anyway. That’s how you achieve great things. That’s how you realise your dreams.”
In 2016, GOG launched its first lifestyle park, GOG Lifestyle. Since then, two more lifestyle parks have been added, GOG Gardens in Soweto, and GOG Kids in Chameleon Village in Hartbeespoort. The company’s biggest venture, Happy Island will soon be open to the public as well.
GOG’s genesis was outdoor gyms, and the company continues to grow from these original roots: Catering to a growing focus on healthier lifestyles, from public parks to beaches, corporates and residential estates.
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